Bitcoin Whales’ Covered Call Strategy Is Dragging Down Spot Prices, Warns Analyst

Bitcoin's big players are quietly capping its potential—and pocketing premiums while they're at it.

The Whale's Playbook

Forget simple hodling. Major Bitcoin holders are deploying a classic Wall Street tactic: selling covered calls. They're using their massive coin stashes to write options contracts, collecting juicy cash upfront. The catch? They agree to sell their Bitcoin at a set price if it rallies too high, creating a hidden ceiling for the market.

The Downward Pressure

This isn't just smart portfolio management—it's active market shaping. Every large covered call sale adds latent sell pressure. If prices approach those strike levels, whales are incentivized to sell or hedge, effectively turning bullish rallies into self-fulfilling resistance zones. The strategy generates income but can mute explosive upside, weighing directly on spot price momentum.

A Calculated Trade-Off

The whales aren't betting against Bitcoin long-term. They're monetizing volatility and locking in profits in a sideways or cautiously bullish market. It's a hedge fund move in a decentralized world—proving that when big money shows up, it brings all its old tricks, complete with the cynical preference for steady gains over moonshot potential. Sometimes, the most sophisticated crypto strategy looks a lot like just collecting rent.

Bitcoin OGs Turn to Covered Calls to Generate Yield on Long-Held BTC

Covered calls involve selling call options against bitcoin already held, allowing sellers to collect premiums while giving buyers the right to purchase BTC at a predetermined price.

Park said this strategy is increasingly favored by long-term holders, often referred to as “OGs,” who accumulated Bitcoin years ago and now use options markets to generate short-term income.

The impact, however, extends beyond the options market. Market makers who buy these call options must hedge their exposure, typically by selling spot Bitcoin.

That hedging activity introduces persistent sell-side pressure, pushing prices lower or capping rallies.

“When you sell calls against Bitcoin you’ve held for more than a decade, the only fresh market exposure comes from the call selling itself,” Park said.

“That exposure is negative, making the seller a net source of downward pressure.”

Tom Lee: Bitcoin very likely hits $100k, maybe new ATH

Same guy who said $250k by year end

Now backpedaling to barely above current price while calling it bullish

This is what talking your bags looks like when the trade goes against you https://t.co/eQf5mnnUUo pic.twitter.com/5U6KRVWlfX

Because the Bitcoin used to back these options already exists and does not represent new demand, the strategy fails to add fresh liquidity to the market.

Instead, it shifts price influence toward derivatives trading, where options flows increasingly dictate short-term price action.

Park said this dynamic helps explain why Bitcoin has remained choppy despite steady inflows into spot ETFs.

The trend has coincided with Bitcoin’s partial decoupling from US equities in the latter half of 2025. While major stock indices continued to hit record highs, Bitcoin retreated from earlier peaks and hovered near $90,000.

Some analysts had previously pointed to Bitcoin’s correlation with tech stocks, but recent price behavior suggests different forces are now at play.

Analysts Split on Bitcoin’s Next Move as Fed Rate Cuts Loom

Looking ahead, opinions remain divided. Several analysts expect Bitcoin to resume its rally once the US Federal Reserve continues its rate-cutting cycle, which WOULD inject liquidity into financial markets and favor risk assets.

CME Group’s FedWatch tool shows that 24.4% of traders are pricing in another rate cut at the January FOMC meeting.

Others remain cautious. A growing camp warns that if covered call selling persists and macro conditions fail to improve, Bitcoin could revisit lower levels, with some projecting a drop toward $76,000.

Last week, Bitfinex said the market is showing “seller exhaustion” following a period of heavy deleveraging and panic-driven exits by short-term holders.